Bank Of America / predatory overdraft policies

I’m writing you because you represent my voice and that of my fellow Americans in government when we feel we are being wronged. At this time, Americans are struggling mightily to make ends meet. Your efforts to fix predatory lending practices (especially in sub prime lending) have been noticed and appreciated.

To that end, I feel that another predatory practice by Bank of America needs to be discussed in a public forum and addressed soon thereafter. B of A currently charges fees of $35 per charge when one tries to charge more than one has in his or her bank account. At face value, it may seem that this is a fair practice. I can understand the practice if someone is passing bad checks and a fee has to be assessed. But with today’s debit technology, an automatic decline should be easy and free to the public.

When one digs deeper, one realizes that this is a practice purely designed to unfairly gouge the American public through deceit and obfuscation.

So, here’s the policy…A $35 fee for each time a charge over your funds is ATTEMPTED. As an example, recently I unknowingly was making charges on my debit card when I didn’t have the money to cover it. The charges were numerous but only totaled $23. That’s $23. One charge was for $.27 cents…for which I was charged $35. B of A charged me over $400.00 in overdraft fees for that $23 overage. I called Bank of America to try to find some relief for these charges and was told no. Seems counter to the “flexibility” and understanding for families that the new administration is trying to get in return for billions in bailout dollars.

Look a little deeper and the practice is even more disturbing:

1. You can’t actually just get an option for a decline on your charge without the $35 fee. So, even if you don’t have overdraft coverage, you will still be charged $35. Since technology has allowed banks to simply decline a charge, I don’t understand how BofA can justify charging a $35 fee for each charge versus just declining it for FREE.

2. BofA says the only way to protect against this is to link a BofA credit card or a savings account to your overdraft checking. So, an over-limit charge is charged to your BofA card or deducted from you savings account. In both cases, BofA makes money….either through interest on your credit card or from service fees on the savings account that you are required to have. And, by the way, the overdraft service also has another fee associated with it.

3. As if that weren’t enough, BofA recently increased the allowable number of charges per day from 5 to 8. That a $105.00 per day increase, per cardholder.

The bottom line is that I don’t want my money back from BofA (though they should have at least treated me better considering I hold six accounts with them). I, like the many Americans flooding blogs with similar stories, want justice. I would like this issue explored fully and for Bank of America to be called to answer for this unfair practice. The fact that American taxpayers in the US now own a $50B TARP stake in BofA (which only has a market cap of $40B, by the way), only makes our voices that much more relevant in this matter.

Lastly, I will say that I firmly support Obama’s call for Americans to be more responsible with their money. I was less than responsible for letting my account go overdrawn by $23. Thankfully, my wife and I make decent money and can cover this amount. Just think how American’s with lesser incomes would struggle with this. Then realize that this a core profit center for BofA.

Comments

HANDS DOWN THE WORST BANK KNOWN TO MAN…………….they have no compassion……… THEY CARE ABOUT NOTHING BUT STEELING MONEY FROM PEOPLE AND CHARGING OVER DRAFT FEE’S………., I have been with B of A for 10 years. I am marching down to B of A tomorrow and pulling every account i have with them which includes two personal two savings and two corporate accounts.

BANK OF AMERICA IS THE WORST Bank in existence. THEY ARE MEAN AND corporate. They LIE all the time. They Never EVER will have your back.. They tell you one thing and do another…….. I am finally brave enough to march down and be done with them………………….. I can honestly say I hope they go under. Two Customer r service Reps told me that because my atm deposit did not disclose there would be a 6 day hold on a check that I would get the fee’s reversed……… I call in once the fee’s post and they tell me that they don’t know what I am talking about…………..i begged them to listen to the call themselves so they can hear for themselves the promise that was made to me and they told me the calls being monitored is for quality control only.… Good answer!!! You think we are stupid…….. Needless to say I am having my attorney supine the notes……………….. I was LIED TO………… THEY ARE UNETHICAL………….. IF ANYONE THINKS ABOUT Opening AN ACCOUNT WITH THEM PLEASE DO NOT DO IT……………. THEY WILL ### YOU OVER LIKE THEY HAVE SO MANY PEOPLE.. WHY DO YOU THINK THEY HAVE SO MANY LAWSUITS AGAINST THEM BY THE PEOPLE SPEAKING OUT ABOUT THEY WAY B OF A TREATS THEM AND OVER CHARGES THEM……………………………… GOOD LUCK B OF A……… KEEP TREATING PEOPLE LIKE crap. I’m sure it will defiantly get you somewhere!!!

First, the individuals responsibility to managing their money. That is an obvious issue that must be addressed. Americans do need to be able to control their spending and be aware of their finances as they use them. There is little room for argument or debate on this issue. It seems quite cut and dry.

Second the Banks need to offer their customers their money so that they can spend it how they see fit. The banks are not financial counselors or babysitters deciding how your money is spent. They are an institution in business to make money.

Thirdly the free market should dictate legislation to protect both the consumer and the business from flagrant and inappropriate practices that can cause financial devastation. Simply put, fraud protection and consumer purchasing protection.

With these three basic understandings we can address the real issue here. There is the reality that americans are being held under by predatory lending practices. We just ended a decade of such practices at the mortgage end of the banking institutions. They realize that americans are financially uneducated for the most part, and reap the benefits at the expense of the whole nation. We just paid out billions of dollars to how many banks as Obama nationalized them? The answer is in 100's of billions. So, now we get down to something as simple as overdrafts. A fee for someone who is not paying attention to their spending pattern and overdrafts their account is understandable, but the banking system creates a method of controling your payments and ordering them so that if you do overdraft you are likely to do it several times. They simply call this highest to lowest. As your payments get allocated to the account your credit line lowers and you have less in there, but if you make the largest purchase at end of the day it goes to the beginning and you start with a much lower line after that. It is an intentional behavior done to maximize profit and capitlize on inappropriate spending patterns. So there are some questions:

Should the banks be allowed to determine which payment is made first. It seems that when a payment is placed on your acct it should be removed, and not rearranged so that you find yourself in such a situation. Now, the real issue is that this behavior is mainly applied to those who are low income because they live paycheck to paycheck and dont have necessarily the best credit. So, the banks will say it is to give them the opportunity to pay their rent on time without having issues with their landlords or their mortgages. But then, is that the banks place to determine our spending patterns. That becomes an issue of control as a means to reap benefit of the poor.

Should Government create legislation that would put an end to practices. Well, we already see our government in to many arenas. However, they did just bail out the banks, really it was me and you that bailed out the banks, so YES, it seems appropriate that the banks should not be allowed to dictate the order of payments based on the fact that americans are the ones that are bailing them out.

Finally, should a class action law suit be brought to the banks that practice these predatory charges. It is clear that the average american can not affor 2 or 3 charges on their acct from week to week. So, how does one go about beginning such a suit. The reality is that, YES, the banks should be forced to pay restitution because infact it is criminal to levy such charges under the premise that they know how to spend your money better than you do. The reality is they are a bank and hold your money. You do them the favor, not the other way around. They make you feel stupid and useless when you do talk to them about it and it is with disregard that they throw you away when you ask for some sort of levity. B of A makes 17 million a day roughly from such charges. That is over a billion a year in overdraft charges alone. They should be held responsible for abuse as well as any bank that feels they can determine the psychy of peoples spending behaviors and then generate specific methods for controling those patterns based on their judgement. Wouldnt it be more appropriate that if you make a purchase that money be removed in an age of electronics where everything happens instantly?

I don't expect the Feds to do anything about BOA's predatory business practices. My suggestion is eveyone document their purchases and be responsible, and if BOA
continues to charge fees that are questionable and predatory business tactics
to increase their bottom line, start a email message center and create a class
action lawsuite. If you hurt the Boa maybe they will quit swallowing peoples
money. You have to opt into the automatic decline of overdraft for debit
cards, but they will not verbally disclose it to you unless you corner them.
Don't expect Berry Obama to help either, he is the same lawyer that robbed
from banks to loan money to unqualified home buyers that defaulted in the housing crisis. Berry's smiley face fascism will kill businesses and make eveyone equal.
Equally poor.

I am on disability Social Security fixed income. I almost became homeless because bank of america hit me seven times for one overdraft transaction. Thanks to some community agency our rent was paid. I understand them getting paid for NSF but not at the extent to keep adding fees. I have been a long time customer since 1981 and stayed when the change over to Bank of America. I can't afford to keep catching up every month to their charges. I really don't like changing banks but I am forced too.